The introduction of a raft of regulation across Europe and persistent market challenges mean that having a broadly skilled and fully qualified board is more important for real estate funds now than ever, according to the managing director of DCG Real Estate.

Speaking at the ESAFON Real Estate Fund Servicing Conference in Luxembourg on 26 October, Christopher Bennett, Head of Real Estate at DCG, highlighted the importance of governance against the backdrop of the evolving regulatory landscape in Europe to an audience of over 50 senior fund professionals and intermediaries.

In his address on ‘The Governance of a Property Debt Fund’, Christopher Bennett commented:

“In the current environment, boards of real estate funds need to ensure they fully understand the complexity of an increasingly sophisticated sector. Weighing up the risks, ensuring all necessary documentation is held on file, demonstrating a healthy scepticism and understanding political as well as the financial, legal and practical issues, are all key skills. If directors are comfortable and suitably qualified to analyse such an environment, they can flourish. If not, the consequences can be serious.”

The conference, held at the Légère Premium Hotel in Luxembourg, focused on the challenges for Real Estate fund managers and service providers in the context of the AIFM Directive, what the new AIFMD compliant structures and models will look like in Luxembourg, and the importance of risk management and governance in the real estate sector.

Christopher Bennett, who was also chairman of the day-long conference, commented that, with all this in mind, Luxembourg was extremely well prepared for the forthcoming challenges. He added:

“In terms of gearing up for future regulatory changes and market developments, it was clear from the conference that Luxembourg is very much on the front foot. There is appropriate legislation due to come into the statute book in early 2013, whilst a combination of robust management company models, the new Limited Partnership law, the presence of non-bank depositaries and a wealth of risk management expertise position Luxembourg strongly for the challenges ahead.”